What You Need to Know
- RGA recorded $260 million in first-quarter COVID-19 claims, down from $340 million in the year-earlier quarter.
- MetLife says its COVID-19 claims fell to $230 million, from $290 million.
- Primerica says its COVID-19 claims fell to $16 million, from $21 million.
COVID-19 returned to killing older Americans at a much higher rate than younger Americans in the first quarter, and that helped to hold down life insurers’ death claims.
The pandemic killed about 155,000 U.S. residents in the latest quarter. That was up from 127,000 in the fourth quarter of 2021, but down from 191,000 in the first quarter of 2021, according to statistics from the U.S. Centers for Disease Control and Prevention and other public and private sources.
Some life insurers and reinsurers that posted earnings last week skipped COVID-19 mortality details.
Companies that gave details said that, although the overall number of deaths was very high in the latest quarter, a drop in the COVID-19 death rate for people for under age 65 led to year-over-year decreases in pandemic-related life insurance claim costs.
What It Means
Life insurers, insurance agents and retirement planners continue to face a high level of uncertainty over how long older Americans have to live.
Actuarial groups and many planners have emphasized that the effects of the COVID-19 pandemic appear to be temporary, but, at this point, the pandemic has lasted for more than 26 months. That’s about 12% of the 2018 life expectancy of a 65-year-old male.
Reinsurance Group of America — a Chesterfield, Missouri-based reinsurer — said its U.S. COVID-19 individual life claims fell to $260 million in the latest quarter, from $340 million a year earlier.
“Our U.S. individual mortality results are very consistent with what we are seeing in the general population this quarter,” Jonathan Porter, RGA’s global chief risk officer, said Friday, during a conference call with securities analysts. “We saw a reduction in our claim cost per 10,000 general population deaths as compared to the third quarter and fourth quarter of 2021. This improvement, we believe, is in part due to the lower proportion of deaths in working ages.”
Here’s what happened to U.S. COVID-19 claim statistics at some other life insurers, including some that are known mainly for group life:
MetLife: $230 million in world group life claims this quarter, down from $280 million a year earlier.
Hartford Financial: $96 million before taxes this quarter, down from $185 million a year earlier.
Unum: 1,400 deaths at an average of $55,000, or $77 million, down from 1,725 deaths at an average of $65,000, or $112 million, a year earlier.
Lincoln Financial: $53 million in group life claim claims and $18 million in group disability claims this quarter, down from $83 million in group life claims and $7 million in group disability claims a year earlier.
Voya: $35 million in group life claims this quarter, up from $29 million a year earlier.
Primerica: $16 million in life claims this quarter, down from $21 million a year earlier.
At these insurers alone, first-quarter COVID-19 claims were down from about $1.1 billion in the first quarter of 2021, but still totaled about $785 million.
These figures don’t include COVID-19 claims for some large publicly traded life insurers, or for any of the mutual life insurers.
MetLife’s first-quarter group life mortality ratio, or ratio of benefits to premiums, was 103.8% in the first quarter. That was down from the chilling loss ratio of 106.% recorded in the first quarter of 2021, but up from a normal loss ratio of 85% to 90%.
Similarly, at RGA, the loss ratio for traditional reinsurance in the United States and Latin America was 114.5%. That was down from 122.6% for the first quarter of 2021, but up from 95.8% in the first quarter of 2019, and up from 99.6% in the first quarter of 2020.
Kidney Dialysis Volume
DaVita — a Denver-based kidney care company — also reported pandemic-related mortality figures, because pandemic-related deaths have a direct effect on its service volume.
The company was providing dialysis treatments for 96,821 people per day in the first quarter of 2020, up 1.6% from the average for the first quarter of 2021.
The pandemic increased patient mortality enough to cut the average number of treatments per day by 2.3% between 2020 and 2021, and by another 2.4% between the first quarter of 2021 and the latest quarter.
Because of all of the deaths, the average number of DaVita dialysis treatments fell to 92,335 in the latest quarter.
Life insurers presented the the COVID-19 numbers when they released their results for the first quarter.
Here’s a look at some of the earnings.
Group and Individual
Prudential Financial is reporting a $44 million net loss for the first quarter on $14 billion in revenue, compared with $2.8 billion in net income on $14 billion in revenue for the first quarter of 2021.
Prudential’s U.S. businesses are reporting $943 million in adjusted operating income before income taxes on $7.3 billion in revenue, compared with $843 million in adjusted operating income on $6.6 billion in revenue for the year-earlier quarter.